Omeros Corporation Reports First Quarter 2018 Financial Results

– Conference Call Today at 4:30 p.m. ET –

May 10, 2018 04:05 PM Eastern Daylight Time

SEATTLE--(EON: Enhanced Online News)--Omeros Corporation (NASDAQ: OMER) today announced recent highlights and
developments as well as financial results for the first quarter ended
March 31, 2018, which include:

1Q 2018 total and OMIDRIA® revenues were $1.6 million,
compared to $12.3 million in 1Q 2017; the decrease is the result of
the scheduled expiration of OMIDRIA pass-through reimbursement status
on January 1, 2018.

The Consolidated Appropriations Act, signed into law in March 2018,
includes a provision granting a two-year pass-through extension,
beginning on October 1, 2018, for a small number of drugs including
OMIDRIA.

Net loss in 1Q 2018 was $30.1 million, or $0.62 per share. Non-cash
expenses for 1Q 2018 were $4.3 million, or $0.09 per share. Overall
decrease in cash, cash equivalents and short-term investments for the
quarter was $10.9 million.

At March 31, 2018, the company had cash, cash equivalents and
short-term investments available for operations of $72.8 million. An
additional $45.0 million available under the company’s existing credit
facility is expected to fund on May 18, 2018.

Patient enrollment began in the OMS721 Phase 3 clinical trial (known
as ARTEMIS-IGAN) in patients with Immunoglobulin A (IgA) nephropathy.

Following recent interactions with FDA, Omeros believes that it has a
clear path to approval for OMS721 in high-risk HSCT-TMA, intends to
continue working closely with FDA to achieve this objective and has
begun preparations to submit a Biologics License Application (BLA).

OMIDRIA was added to the Veterans Health Administration National
Formulary in April 2018.

“During the first quarter of 2018, we made tremendous progress in our
MASP-2 program,” said Gregory A. Demopulos, M.D., chairman and chief
executive officer of Omeros. “We believe that we now have clear paths to
accelerated approval for OMS721 in both stem-cell TMA and IgA
nephropathy. With breakthrough therapy designations in both of these
indications, we look forward to continuing to work closely with FDA and,
for stem-cell TMA, we have initiated preparations for a BLA submission.
Our PDE7 inhibitor OMS527 is poised to enter the clinic in mid-year and,
in late 2019 through 2020, we expect to begin clinical trials for our
MASP-3 antibody OMS906 and for our small-molecule MASP-2 inhibitors. A
number of our GPCR programs are also moving toward the clinic, providing
the potential for wholly new mechanisms for the treatment of a broad
range of diseases and disorders, including cancers. With the Omeros team
and the reinstatement of CMS separate payment for OMIDRIA, we believe
that we will have the resources to deliver on the immense promise of
these programs to benefit patients, many of whom have conditions for
which there are no treatments.”

Omeros announced in April 2018 that the U.S. Food and Drug
Administration (FDA) granted breakthrough therapy designation to
OMS721 for the treatment of patients with high-risk HSCT-TMA,
specifically those patients who have persistent TMA despite
modification of immunosuppressive therapy. This is the second
breakthrough therapy designation for OMS721, which last year
received the designation from FDA for the treatment of IgA
nephropathy.

Omeros recently met with FDA to discuss requirements for approval
of OMS721 in high-risk HSCT-TMA. Based on that meeting, Omeros
believes that it has clear paths to both accelerated and full
approval of OMS721 in this indication. In addition to the data
provided to FDA, the Agency requested that the company further
characterize the patients treated with OMS721 – all of whom had
high-risk TMA – and compile and submit additional information on
the historical control population for the purpose of further
comparing outcomes across corresponding patients. FDA also
requested an analysis plan to assess the company’s biomarker data.
Should FDA grant OMS721 accelerated approval for the treatment of
high-risk stem cell-TMA patients, the drug would be made
commercially available for stem-cell patients with this highly
lethal disorder. Concurrently, Omeros would conduct a confirmatory
trial for subsequent full approval. Omeros intends to continue
working closely with FDA as the company further compiles all
required information with the objective of initiating a rolling
BLA submission later this year. In Europe, the company is
scheduling meetings with regulatory authorities to discuss plans
for submission of an application for conditional marketing
authorization for OMS721 in HSCT-TMA.

In February and April 2018, Omeros reported new results in
patients with HSCT-TMA from the ongoing Phase 2 study. The
estimated median survival for OMS721-treated patients was an order
of magnitude greater than that for a matched historical control
(p<0.0001). After study patients had reached an adequate duration
of follow-up, further data analysis examined 100-day mortality, an
important measure previously used as an approval endpoint in HSCT.
That analysis also showed that OMS721-treated patients had
improved survival relative to the historical control (53 percent
vs 10 percent; p = 0.0002). Biomarkers of disease (i.e.,
mean platelet count and mean levels of lactate dehydrogenase and
haptoglobin), demonstrated statistically significant improvement.
Study patients also showed substantial improvement in red blood
cell and platelet transfusion requirements.

In February 2018, the EMA granted OMS721 orphan drug designation
in the treatment of IgA nephropathy. Enrollment in the Phase 3
clinical trial ARTEMIS-IGAN is ongoing.

Recent developments regarding OMIDRIA include:

In March 2018, the Consolidated Appropriations Act, 2018
(Consolidated Appropriations Act) was signed into law and included
a two-year extension of pass-through reimbursement status for
OMIDRIA and a small number of other drugs used during procedures
performed on Medicare Part B fee-for-service patients. As a
result, OMIDRIA will receive a reinstatement of separate payment
beginning October 1, 2018 through September 30, 2020.

OMIDRIA was added to the Veterans Health Administration (VA)
National Formulary in April 2018. With its addition to the
formulary, the drug is now available in all VA facilities that
perform ophthalmic procedures. The initial recommendation is that
OMIDRIA be limited to use in high-risk patients as determined by
each VA ophthalmic surgeon at his or her discretion.

In April 2018, Omeros announced that the results of four
“real-world” clinical studies were presented at the American
Society of Cataract and Refractive Surgery and American Society of
Ophthalmic Administrators Annual Meeting held in Washington, D.C.
The studies demonstrate significant benefits of OMIDRIA to both
patients and surgeons across routine and complex cataract surgery
cases performed in high-volume surgery centers, with and without
femtosecond laser.

In April 2018, the company’s credit facility with CRG was amended to
eliminate the revenue and market capitalization covenants with respect
to the twelve-month period ending on December 31, 2018 and to reduce
the market capitalization threshold for future periods to three times
the aggregate principal amount of loans outstanding (excluding any
payment-in-kind loans) on the applicable determination date. Omeros
issued five-year warrants to the lenders for up to 200,000 shares of
the company’s common stock at an exercise price per share of $23.00,
which represents approximately a 70-percent premium to the closing
price of Omeros’ common stock at that time. In addition, the company
has requested the $45.0 million currently available under the CRG
credit facility and expects funding to occur on May 18, 2018.

Financial Results

For the quarter ended March 31, 2018, revenues were $1.6 million, all
relating to sales of OMIDRIA. This compares to OMIDRIA revenues of $12.3
million for the same period in 2017. On a sequential
quarter-over-quarter basis, OMIDRIA revenues decreased $12.2 million,
which is attributable to reduced ASC and hospital purchasing following
the scheduled loss of pass-through reimbursement status as of January 1,
2018. As part of the Consolidated Appropriations Act, pass-through
status for OMIDRIA was reinstated for a two-year period, effective
October 1, 2018 through September 30, 2020.

Total costs and expenses for the three months ended March 31, 2018 were
$29.3 million compared to $25.0 million for the same period in 2017. The
increase in the current year quarter was primarily due to higher
manufacturing scale-up costs for the OMS721 programs as Omeros continues
to increase production capacity to meet anticipated clinical and
commercial requirements as well as to incremental costs associated with
initiating the OMS721 IgA nephropathy Phase 3 clinical trial.

For the three months ended March 31, 2018, Omeros reported a net loss of
$30.1 million, or $0.62 per share, which included non-cash expenses of
$4.3 million ($0.09 per share). In comparison, for the prior year’s
first quarter Omeros reported a net loss of $15.1 million, or $0.34 per
share including non-cash expenses of $4.4 million ($0.10 per share).

As of March 31, 2018, the company had $72.8 million of cash, cash
equivalents and short-term investments available for operations and
another $5.8 million in restricted investments. In addition, the company
has requested $45.0 million currently available under the company’s
existing credit facility and expects funding to occur on May 18, 2018.

Conference Call Details

Omeros’ management will host a conference call to discuss the financial
results and to provide an update on business activities. The call will
be held today at 1:30 p.m. Pacific Time; 4:30 p.m. Eastern Time. To
access the live conference call via phone, please dial (844) 831-4029
from the United States and Canada or (920) 663-6278 internationally. The
participant passcode is 8579459. Please dial in approximately 10 minutes
prior to the start of the call. A telephone replay will be available for
one week following the call and may be accessed by dialing (855)
859-2056 from the United States and Canada or (404) 537-3406
internationally. The replay passcode is 8579459.

To access the live or subsequently archived webcast of the conference
call on the internet, go to the company’s website at www.omeros.com
and select “Events” under the Investors section of the website. To
access the live webcast, please connect to the website at least 15
minutes prior to the call to allow for any software download that may be
necessary.

About Omeros Corporation

Omeros is a commercial-stage biopharmaceutical company committed to
discovering, developing and commercializing small-molecule and protein
therapeutics for large-market as well as orphan indications targeting
inflammation, complement-mediated diseases and disorders of the central
nervous system. The company’s drug product OMIDRIA®
(phenylephrine and ketorolac intraocular solution) 1% / 0.3% is marketed
for use during cataract surgery or intraocular lens (IOL) replacement to
maintain pupil size by preventing intraoperative miosis (pupil
constriction) and to reduce postoperative ocular pain. In the European
Union, the European Commission has approved OMIDRIA for use in cataract
surgery and other IOL replacement procedures to maintain mydriasis
(pupil dilation), prevent miosis (pupil constriction), and to reduce
postoperative eye pain. Omeros has multiple Phase 3 and Phase 2
clinical-stage development programs focused on: complement-associated
thrombotic microangiopathies; complement-mediated
glomerulonephropathies; cognitive impairment; and addictive and
compulsive disorders. In addition, Omeros has a diverse group of
preclinical programs and a proprietary G protein-coupled receptor (GPCR)
platform through which it controls 54 new GPCR drug targets and
corresponding compounds, a number of which are in preclinical
development. The company also exclusively possesses a novel
antibody-generating platform.

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934, which are subject to the “safe
harbor” created by those sections for such statements. All statements
other than statements of historical fact are forward-looking statements,
which are often indicated by terms such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “goal,” “intend,” “likely,” “look forward
to,” “may,” “objective,” “plan,” “potential,” “predict,” “project,”
“should,” “will,” “would” and similar expressions and variations
thereof. Forward-looking statements are based on management’s beliefs
and assumptions and on information available to management only as of
the date of this press release. Omeros’ actual results could differ
materially from those anticipated in these forward-looking statements
for many reasons, including, without limitation, risks associated with
product commercialization and commercial operations, unproven
preclinical and clinical development activities, regulatory oversight,
intellectual property claims, competitive developments, litigation, and
the risks, uncertainties and other factors described under the heading
“Risk Factors” in the company’s Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission on May 10, 2018. Given these
risks, uncertainties and other factors, you should not place undue
reliance on these forward-looking statements, and the company assumes no
obligation to update these forward-looking statements, even if new
information becomes available in the future.

OMEROS CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

Three Months Ended

March 31,

2018

2017

Revenue:

Product sales, net

$

1,588

$

12,257

Costs and expenses:

Cost of product sales

203

271

Research and development

18,140

12,240

Selling, general and administrative

10,934

12,471

Total costs and expenses

29,277

24,982

Loss from operations

(27,689

)

(12,725

)

Interest expense

(2,825

)

(2,663

)

Other income

460

299

Net loss

$

(30,054

)

$

(15,089

)

Comprehensive loss

$

(30,054

)

$

(15,089

)

Basic and diluted net loss per share

$

(0.62

)

$

(0.34

)

Weighted-average shares used to compute basic and diluted net loss
per share

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